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Banc of California Victim of $13.7 Million Fraud

Santa Ana’s Banc of California Inc. (NYSE: BANC) reported that it may have been the victim of a $13.7 million fraud.

The bank on Feb. 1 granted a $15 million line of credit to an unnamed borrower who provided false documents, Banc of California said in a filing today with the Securities and Exchange Commission.

On March 9, the bank received information on the alleged fraud and closed the account.

The bank is recording a first-quarter $13.7 million loan loss provision, “which reflects the aggregate amount disbursed under a $15 million line of credit.”

The company estimated the charge-off amount will have an immaterial impact on the various regulatory capital ratios.

Banc of California said it believes it was an isolated event involving a single borrower. It is continuing to investigate the matter and has notified law enforcement authorities.

The bank shares have risen 12% since Feb. 5.

Doug Bowers, who became chief executive last May, in February laid out his long-term goals to investors and analysts.

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.
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